North Star Meat Merchants Inc. registers application with the Philippine Securities and Exchange Commission for initial public offering
MANILA, Philippines, 21 March 2021 — North Star Meat Merchants Inc. (“North Star” or the “Company”), one of the largest pork and beef vendors in the country, filed with the Securities and Exchange Commission (SEC) today its Registration Statement for the offer and sale of up to 392 million common shares, consisting of 360 million primary shares and 32 million secondary shares, with an over-allotment option of up to 58 million secondary common shares that will be used for the price stabilization activities if the same will be undertaken. The offer shares will be offered at a price of up to P10 each.
The consumer-staple Company hit Php 9.28 Billion in sales last 2021 and has consistently grown with a CAGR of 39.7% since 2019.
As the total meat consumption of the Philippines grows, they have moved toward launching an initial public offering (IPO) to accelerate the expansion of its end-to-end cold chain infrastructure and operations. In addition, the Company is looking to expand their financial muscle in order to keep up with the growth of their key retail partners SM Markets and Waltermart Group, and prepare for future potential retail partners.
Subject to regulatory approvals, the IPO will pave the way for the Company to join the Main Board of The Philippine Stock Exchange, Inc. (PSE) and allow the investing public to participate up to [25%] percent of its [1.8 billion] outstanding shares after the offer. The Company plans to run the offer period in June 2022, and targets to list on the Main Board of the PSE before the end of the first half of 2022. NSTAR expects to net around [Php3.5 billion] from the sale of its primary shares during the IPO.
“With increasing demand for fresh and frozen protein, we are keen on accelerating the growth and reach of the Company to consistently provide safe, quality, and affordable meat for everyone” says the 42-year-old North Star Founder & CEO Anthony Ng. “We remain steadfast in our commitment to support the country’s goal to achieve food self-sufficiency and security while creating value for our shareholders.”
Fresh, quality deals for the public
BDO Capital & Investment Corporation (“BDO Capital”) has been engaged as the sole issue manager, and together with China Bank Capital Corporation, will act as the Joint Lead Underwriters and Bookrunners for the IPO.
North Star quotes Eduardo Francisco, President of BDO Capital, as saying: “We expect there to be strong interest for this IPO given North Star’s unique focus on the country’s meat sector and food security, its established and longstanding relationships with retail giants such as the SM group and its unmatched scale of operations.”
“I think many if not most of the investors would be surprised to note that they have actually been consuming North Star’s various fresh and frozen meat products when doing their grocery shopping or dining at certain restaurants and food establishments.”, Francisco added.
With the strategic decision to expand the Bulacan cold storage facility and the opening of the Cebu cold storage facility, North Star was able to increase its maximum storage capacity from 2.1 million kilos to 8.0 million kilos when the economy was in the midst of the pandemic. This expanded capacity is expected to be fully utilized as the Company sees the reopening and growth of the hospitality and tourism industries.
North Star’s operational excellence and credentials promises safety across the supply chain as the Company’s Bulacan Plant is Triple A rated by the National Meat Inspection Service of the Department of Agriculture (DA-NMIS) and HACCP Certified.
Meeting the changing demands of Filipino consumers
Aside from advancing its expansion plans, North Star looks to further strengthen its presence in the cold chain solutions sector by creating synergies with public entities such as the Department of Agriculture (DA). The strategic partnership with the DA allows for a contract growing arrangement with small sized pig farmers by North Star to be distributed to its customers with outlets nationwide, boosting the confidence of local farmers to maximize production capabilities.
“North Star believes that it is well-positioned to take advantage of a young and growing meat consuming population. An increase in purchasing power translates to an increase in meat consumption per capita” says Ng. “Due to the pandemic, we believe that consumers have now become more health and safety conscious affecting what they consume and where they purchase their food. North Star stands to benefit from this change in consumer behavior by being available in 360 supermarkets and 1251 convenience stores nationwide”
Subject to regulatory approvals, execution of definitive agreements and market conditions, North Star will be the first meat and protein pure play in the equity market.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN SUBMITTED TO THE PHILIPPINES SECURITIES AND EXCHANGE COMMISSION, BUT HAS NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR OFFERS TO BUY THEM BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT IS RENDERED EFFECTIVE. THIS COMMUNICATION SHALL NOT CONSTITUTE AN OFFER TO SELL OR BE CONSIDERED A SOLICITATION TO BUY.